Should Michigan Tax Senior's Pensions?

Surprised no one has posted a link to this front page story.
http://www.freep.com/article/2009120...n-tax-pensions?

Are these legislators going after our vulnerable grandparents? Are they trying to make beloved Aunt Millie eat petfood?

Or is it about time our fiscally challenged state established a fair tax policy? Have we allowed the proportionately most affluent demographic to get a free ride long enough?

Will the responses be along policy lines? Will compansionate conservatives support everybody equally pulling their own weight? Will bleeding heart liberals want the seniors to continue to shelter their income because they're old and on a "fixed income"? Or will support of the idea be divided along generational lines?

Tax them, devalue their dollars, and take away the benefits [[Medicare and SS) that they paid for...who was it that was supposed to be out to kill seniors and take away their Medicare according to Democrats?

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Will compasionate conservatives support everybody equally pulling their own weight?

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"Compassionate" conservatives supporting increased taxes?! Doubt that. ;)

Increasing government theft and oppression is compassionate how?

Pulling your own weight means allowing the fruits of your labor to be taken from you and given to someone else at the whim of a collectivist government?

Once upon a time, pulling your own weight meant working hard to support yourself and generate wealth for yourself if possible. Once accomplished, there is no need for government, or anyone else, to support you. On a large scale, the need for government at all is limited [[as in the constitution).

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Originally Posted by ccbatson

Increasing government theft and oppression is compassionate how?

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Where is this government theft you refer to? Seniors drive on state roads. Seniors enjoy police and fire protection. Seniors visit state parks.
If seniors benefit from the services provided by the state, why shouldn't they be asked to contribute?
"About 95% of Michiganders 65 and older don't pay any state income tax, including many of the relatively few who earn $100,000 a year or more from pensions, Social Security and IRA and 401[[k) withdrawals."

Depends on the pension amount. Over $100,000 should be taxed at some rate, maybe half of the normal rate.

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Originally Posted by ccbatson

Pulling your own weight means allowing the fruits of your labor to be taken from you and given to someone else at the whim of a collectivist government?

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Hope you remember that when I am giving my money to you in terms of Social Security

From the article:

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State budget director Bob Emerson, a former lawmaker, said, "Politicians are fearful of senior voters."

But Emerson said there are murmurs in the Capitol of modestly taxing retirement income as part of a larger revision of Michigan's tax system. And he's an advocate........

"If you're going to have a fair tax system, you should tax all income equally. That's my personal opinion.". Emerson receives a state pension of more than $80,000 for his 24 years in the Legislature......

He voted in the mid-1990s to give private pensions nearly the same exemption as public pensions.

The exemption is tied to inflation, so retirees with private company pensions, IRAs and the like have gotten a bigger exemption every year.

"We have really gone off the deep end on it," Emerson said. "The benefits we provide to people are excessive."

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I'm assuming that he's not referring to state employee benefits or benefits paid by the state to those in need. Therefore, he must be calling the private pension exemption an excessive benefit, despite the fact that he voted for it and it is not nearly as generous as the uncapped public pension exemption.

If that's the case, his use of the words "benefits we provide" reflects the same newspeak that twists government spending into "investments". The government doesn't provide anything to their sources of revenue, they take from them.

I don't see how anyone can consider a private pension tax exemption a "provided benefit" and I don't see how can it be considered "excessive" when it is capped - unlike public pensions.

If the state wants to revise the tax code to make it more "fair", they should tax all earned income, private pensions and public pensions equally. And IMHO, the only way to do it fairly is to make the change revenue-neutral by rolling back the tax rate so that income-earners get a break, since they've been the ones who've had to unfairly carry all those "freeloading" retirees.

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Originally Posted by Mikeg

If that's the case, his use of the words "benefits we provide" reflects the same newspeak that twists government spending into "investments". The government doesn't provide anything to their sources of revenue, they take from them.

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Yes, the usual spin job on how gov't portrays to the public of what they do with our money. They have nothing to "give" that they don't take/extort from the taxpayer. I cringe when I hear them say that they "have to pay" for a tax cut or reduced spending somehow. As if a tax cut or reduced spending "costs" them anything. It us who do all the "paying." As for seniors not paying income tax, they're still paying sales tax, gasoline tax, and property taxes to the state. The state shouldn't focus on extorting more money from them, the state should focus on reducing working people's income tax. Has the Michigan legislature taken any sort of a pay/benefits cut since the meltdown? I must have missed that headline. That's one thing Grandholm could do to blow me away, take even just a modest 10% pay cut and pension reduction, and apply it to every politician in the state. IMO politicians shouldn't be eligible for any kind of pension at the state or federal level. They can invest/gamble in 401k's for retirement, like the rest of us.

How much tax should the seniors pay? Why doesn't the state just get rid of them all and take what little most of them have. So what if a person works hard all their life and wants to somewhat enjoy some of the fruits of their labor, just take what you can to feed the lazy and shiftless. Maybe take from the old so the useless teachers unions can cry for more and more. Maybe the worthless state govt. can find ways to spend money on more useless things that will buy them votes. I've seen my mom and dad work hard all their life and give back to the community in all kinds of ways, yet now that they are old and can't do very much the state wants to take more from what little them have.

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Originally Posted by littlebuddy

How much tax should the seniors pay? Why doesn't the state just get rid of them all and take what little most of them have. So what if a person works hard all their life and wants to somewhat enjoy some of the fruits of their labor, just take what you can to feed the lazy and shiftless. Maybe take from the old so the useless teachers unions can cry for more and more. Maybe the worthless state govt. can find ways to spend money on more useless things that will buy them votes. I've seen my mom and dad work hard all their life and give back to the community in all kinds of ways, yet now that they are old and can't do very much the state wants to take more from what little them have.

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[sarcasm]They must just be greedy since they don't want to pay more taxes.[/sarcasm]

My answer: Death Panels. It's the only affordable option.

Have any of you screaming about the unfairness of taxing seniors even bothered to notice that the lawmakers are not proposing anything of the sort. And where you folks get the idea they are taxing seniors to pay for teachers or "lazy" people, well, you need to lay off the right wing kool-aid.

It was a hypothetical question: should seniors have to pay income tax like every body else? The newspaper was just creating a story to sell papers.

D.mcc...I have put far more into SS than I will ever get out.

Horse manure. The last estimate I read was that, had you begun paying into SS from its inception and payed the max allowable amount each year, it would take three years of retirement to exhaust all the money you'd put in.

That was back in the late 90's. I doubt very much that it's changed much since then.

So unless you only plan to live a handful or less of years after you retire, you'll get it all back plus more.

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Originally Posted by elganned

Horse manure. The last estimate I read was that, had you begun paying into SS from its inception and payed the max allowable amount each year, it would take three years of retirement to exhaust all the money you'd put in.

That was back in the late 90's. I doubt very much that it's changed much since then.

So unless you only plan to live a handful or less of years after you retire, you'll get it all back plus more.

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I don't believe that estimate for a second. A quick calculation of my own SS tax shows that I'd have to be paid around $900 per week from SS to exhaust what I will likely pay into it during my career in 3 years. Double that amount if you take into consideration what your employer also pays on your behalf to SS, which is probably money they'd be paying you instead. So $1800 would be my payment to exhaust it in 3 years is my calculation. Are SS payments that generous? Even at half that, $900, I don't think I'll be getting that every week from SS.

Clearly you read a very erroneous estimate Elganned...All you need to do is look at the SS statement that you get every year to see that you are wrong.

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Originally Posted by elganned

Horse manure. The last estimate I read was that, had you begun paying into SS from its inception and payed the max allowable amount each year, it would take three years of retirement to exhaust all the money you'd put in.

That was back in the late 90's. I doubt very much that it's changed much since then.

So unless you only plan to live a handful or less of years after you retire, you'll get it all back plus more.

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Based on my own situation, where I and my employers paid the max for 30 years, elganned's statement is absolutely not true.

Elganned doesn't take inflation over 30 years into account either.

Elganned is just flat wrong here...maybe he will retract his erroneous statement...just don't hold your breath waiting for him to do it.

My understanding is that, unless it's been repealed, Bill Clinton while in office signed a federal law barring the taxing of pensions across state lines. [[I remember this specifically because it was the only thing he ever did with which I agreed).

So if the state dares to try to grab Aunt Millie's pension check, all she has to do is leave the state for one which is more senior-friendly. And that is very likely what will happen.

Should Michigan Tax Senior's Pensions?
My reply to this is no. They are already living on half of what they earned during their work life. They have less insurance benefits, most own homes and pay a tax on their property-and it's hard to come up with the cash for that with less income.

So easy for the statists to work around that law EMG...sad, but very true.

Had we left the control in the hands of the individuals in the first place...this would be a moot point. Yet another lesson on why not to let government grow.

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Originally Posted by EMG

My understanding is that, unless it's been repealed, Bill Clinton while in office signed a federal law barring the taxing of pensions across state lines. [[I remember this specifically because it was the only thing he ever did with which I agreed).

So if the state dares to try to grab Aunt Millie's pension check, all she has to do is leave the state for one which is more senior-friendly. And that is very likely what will happen.

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You are correct, EMG. It was enacted in response to the People's Republic of California taxing pensions from out of state. That state seems to screw everything up.